Biden Budget Takes Aim at Crypto Wash Trading

Proposed changes on tax rules aroun cryptoasset wash trading could raise up to $24 billion, according to the Biden administration


Source: Shutterstock / lev radin, modified by Blockworks


President Joe Biden’s 2024 Fiscal Year budget will propose tax changes on cryptoasset transactions to eliminate wash trading.

As cryptoassets are not classified as securities, existing cryptocurrency traders are able to claim tax-deductible losses on failed cryptoasset losses and allow them to buy back into the same investments. 

Congress has previously considered changing the status of cryptoassets, but any bill is far from passage in the divided legislature.

This latest change in tax requirements for cryptocurrencies is expected to raise $24 billion for the Treasury, according to the Wall Street Journal.

In addition to applying the same rules to crypto traders as investors in the stock market — the Biden administration is also planning to increase tax rates for America’s wealthiest 0.01% to a minimum of 25%.

Individuals making more than $400,000 a year would see an increase in their taxes from 37% to 39.6% and corporations would see their taxes go up from 21% to 28%.

Currently, cryptocurrencies are considered a digital asset and according to the Internal Revenue Service (IRS) are taxable if they generate a gain or loss, including but not limited to:

  • Sales for fiat currency
  • Exchange for goods and services 
  • Airdrops 
  • Minting and staking activities

The budget is expected to be released today, but will need to be approved by the House of Representatives and the Senate before receiving final sign-off from the President.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

ao cover.jpg


Arweave recently launched the testnet for AO computer, a new messaging protocol that will sit atop a PoS network and aims to become a scalable global compute platform through parallel processing and modularity.


The “fastest-growing ETF in history” has seen net inflows on every trading day since its Jan. 11 launch


Relm and Chainproof will provide insurance quotes to distributed validators


DLC.Link uses a Taproot-based Bitcoin multisig to let institutions mint dlcBTC, starting on Arbitrum


Pre-seed Bitcoin startup deals rose 360% in 2023, a TVP report shows


Circle’s new smart contract to allow holders of BlackRock USD Institutional Digital Liquidity Fund to redeem shares for its stablecoin


Uniswap says it was not surprised to receive a Wells notice given the SEC’s “abusive” use of power as of late